An Overview and a "Legacy"
Following recovery after the panic of 1893, more than forty years passed--a very long generation--before the nation experienced the deepest and most enduring domestic crisis in its history. The depression beginning in 1929 went on for nearly twelve years, punctuated by an abortive recovery in 1936-37. Production of goods and services in 1933, its low point, was less than 70 percent of that for 1929; prices were about three-fourths as high; virtually one-quarter of the work force was unemployed (compared to 18 percent after 1893), and another quarter was working part-time. 1 An overview of the struggle for recovery after 1929 should provide useful clues as to linkages in this struggle with similar efforts following the panic of 1893.
Inevitably the national government was deeply involved. President Herbert Hoover, who in 1928 had offered the nation an ill- advised forecast of "the abolition of poverty," was no "do-nothing" president, no "leave-it-alone-liquidationist." Even before the outbreak of depression he had taken steps to help agriculture, which had known hard times during the generally prosperous 1920s. His Agricultural Marketing Act of 1929 was intended to encourage cooperatives and to make more credit available to farmers, while at the same time encouraging them to adjust production downward toward domestic market demand. In December of that year, because of a budgetary surplus, Hoover recommended and achieved a small one-time-only income tax cut for individuals and corporations. He asked for a $220 million increase in expenditures for public works. He also called on business to maintain wages and investment. As his term wore on and the depression worsened, he sought authorization from Congress for bolder measures. Influenced by the War Finance Corporation of World War I, Hoover established the Reconstruction Finance Corporation in January 1932 to help shore up the economy by providing credit to banks, insurance companies, mortgage companies, and railroads that were in danger of failure, and in